Many of the richest neighborhoods in Manhattan were emptied out as soon as the COVID-19 pandemic hit New York City. The housing market was put on an indefinite pause due to nationwide shelter-in-place and social distancing regulations. Now that these restrictions have been eased and the city has somewhat returned to its normal operations, Manhattan’s housing market is up and running again.
Like other areas in the United States, the housing market in Manhattan currently favors buyers over sellers. The market conditions are still uncertain, and it is necessary to become acquainted with the different factors that are contributing to prices in order to get a bargain on a property. Presently, there is a higher supply than demand, which will lead to a further decline in prices.
Compared to the same time last year, active listings in New York City are currently 22% lower year over year. This remains consistent almost all over the country, as the number of homes listed for sale dropped significantly due to the pandemic. Now, however, data analysis has shown that these numbers are likely to improve in the foreseeable future. Newer listings in Manhattan have started to exceed the levels they were at a year ago. There is an increase in inventory, and this 22% gap is closing rapidly. Still, it remains unclear when the inventory will return back to the levels it is normally at.
While other cities that were not affected as much by the pandemic have seen a seller’s market, New York City has experienced a lower demand than supply. This has favored homebuyers over home sellers, and buyers now have more choices, there are fewer people bidding on more houses, and thus prices have fallen.
In Manhattan, many signed contracts rebounded in July, probably due to a lower inventory as people cannot purchase homes that are no longer for sale. However, other signs, such as the number of listed houses taken off the market in July now being available for sale, shows that there is low demand as well. People who decided not to sell during the earlier months of the pandemic waited so they could get a higher price. Now, when these properties are in the market again, they are unable to get the price they expect due to low demand and reduced interest rates.
Despite these signs, it is uncertain what the future holds for Manhattan’s housing market. There could be a higher demand in the future which drives up prices, or supply could continue to outweigh the demand for houses. The market could also reach an equilibrium and have similar demand and supply. What buyers and sellers should do amidst this uncertainty is keep an eye out for signs that offer insight into which direction the market is tilted, and act accordingly.